Construct · 1 fields · 1 citations

free cash flow hypothesis: a standalone construct

One name. One construct. A landmark on the map.

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Corporate finance

the claim that managers with cash beyond profitable investment needs tend to waste it on growth, and debt disciplines them by forcing payouts.

In corporate finance, free cash flow hypothesis refers to the claim that managers with cash beyond profitable investment needs tend to waste it on growth, and debt disciplines them by forcing payouts. This meaning comes from Jensen (1986/1996) in Corporate Bankruptcy.[1]

Unit
Recovery means
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Nearby constructs

debt3 fields · 3 citationsjingle · one word, three carriers flow6 names · 12 citationsjangle · five names, one experience, partly forcing3 fields · 4 citationsjingle · one word, three constructs

References

Jensen, M. C. (1996). Agency costs of free cash flow, corporate finance, and takeovers. In Corporate Bankruptcy (pp. 11-16). Cambridge University Press. (Original work published 1986) https://doi.org/10.1017/cbo9780511609435.005

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